Emmanuel Okoegwale


In many Countries in Sub-Sahara Africa, subsistence agriculture is a major contributor to the national economy as the primary source of food and income with millions of citizens engaged in the agricultural production activities across the entire value chain.

Though millions of smallholding farmers are actively economically engaged in the sector but only a small fraction of the farmers in the Nigerian economy have access to basic and formal financial services which undermines their productive capabilities and limits growth which in turn, impacts negatively the national agricultural outputs.

Despite the huge population that are actively involved in agricultural activities, only a small proportion of lending goes to that sector, have bank accounts, access to credit, insurance services etc. Historically, the sector had always been undeserved by financial services providers due to their inability to provide access and compelling financial services that meet the needs of the farmers.

Farmers with access to financial services can plan their agricultural investments, hedge against shocks, better management of risks with access to savings, insurance, payment services, remittances services etc.

Financial services stakeholders from standard setting bodies such as the financial and pension regulators, supply-side players such as large commercial and micro-finance banks and mobile money operators, are continually targeting the bottom of the pyramid in the new drive to achieve their financial inclusion targets and seek new growth areas. Financial services providers struggle to understand the smallholder farming segments and reach the economic viable ‘few’ among the millions of the excluded farmers.

As new tech players start playing in the agricultural value chains at the last mile, with new schemes for output aggregation for small farmers, digital procurement platforms, out-grower schemes etc, these new entry points are providing compelling channels for financial services access points for farmers to be financial included.

Agrictech middlemen provide the last mile digitization and farmer-to-market linkages by making digital payments for goods, providing insurance for goods in transit, use of mobile wallets and bank accounts for receiving payments, digital payments for warehousing, logistics, labor etc which creates transnational data points that can be leveraged to provide many other financial services.

Most primary agricultural activities take place in the rural areas with limited bank branches and mobile network coverage which is a major factor for the smallholder farmer’s financial exclusion but with significant improvements in alternative delivery channels which are simple, secure and safe such as mobile phone, agency networks, online and offline transaction mechanisms, every farmer can be reached.

Unlocking the opportunities will provide tech and financial services providers, the opportunity to extend formal financial services to the agrarian communities with opportunities that will make working with farmers more efficient, boosting their productivity and incomes through the deployment of compelling products and services such as such as basic banking, credit, insurance etc.

Small holding farmers can have access to basic financial services, transaction data visibility for other services, market access, direct government subsidy, efficient farmer-to-buyer engagement and agricultural information for improved efficiency and effectiveness.

To achieve these targets, all stakeholders must work together to address the barriers to the smallholding farmer’s journey to financial inclusion such as identification systems, financial literacy, lack of access, low economic activities etc